Prepare the journal entries for all transactions in August

Stacy's Company, owned by F. Stacy, started operations in August and completed the following transactions during the first month of operations.

August 1 F. Stacy invested $75,000 cash in the company

August 2The company purchased $45,000 in office equipment. It paid $15,000 in cash and signed a note payable promising to pay the $10,000 over the next three years

August 2 The company rented office space and paid $8,000 for the August rent

August 6 The company installed a new roof for a customer and immediately collected $9,000

August 7 The company paid a supplier $7,000 for roofing materials used on the August 6th job

August 8 The company purchased a $9,500 copy machine for office use on credit August 9 The company completed work for additional customers on credit in the amount of $26,000

August15 The company paid it's employees' salaries $2,700 for the first half of the month

August17 The company installed a new roof for a customer and immediately collected $3,900

August 20 The company received $10,000 in payments from the customers billed on August 9th

August 28 The company paid $1,500 on the copy machine purchased on August 8th. It will pay the remaining balance in September

August 31 The company paid it's employees' salaries $2,700 for the second half of the month

August 31 The company paid a supplier $5,300 for roofing materials used on the remaining jobs completed during August

August 31 The company paid $850 for this month's utility bill

Fibre2Fashion Ltd. is the country’s largest manufacturer of spun yarn with well-established market. Fibre2Fashion Ltd. has good reputation for quality and service. Their marketing department identified that the potential for global market is expanding rapidly and hence the company undertook exercise for expansion of the capacity for export market. The company formed team of Marketing and Materials department to study

the global logistics possibilities. After extensive study, the team came up with a report on global logistics and submitted that global logistics is essentially same as domestic due to following similarities: • The conceptual logistics framework of linking supply sources, plants, warehouses and customers is the same. • Both systems involve managing the movement and storage of products. • Information is critical to effective provision of customer service, management of inventory, vendor product and cost control. • The functional processes of inventory management, warehousing, order processing, carrier selection, procurement, and vendor payment are required for both. • Economic and safety regulations exist for transportation. The company had very economical and reliable transportation system in existence. For exports as well they decided to evaluate capabilities of their existing transporter and entrusted them with the job of transport till port. For customs formalities they engaged a good CHA after proper cost evaluation and entered into contract for freight with shipping company agent. The response for company’s export was very good and the company could get as manyas 15 customers within first two months and reached to a level of USD 250,000 per month by the end of first half of the year. Based on this response the export volumes were expected to grow to a level of USD 400,000 per month by the end of the year. When the review was made at the end of the year, company found that export volumes had in fact come down to the level of USD 120,000 which was much lower than it had reached in the first half of the year. The managing committee had an emergency meeting to discuss this and the export manager was entrusted with the task of identifying the reasons for this decline. Mr. Ganesh decided to visit the customers for getting the first-hand information. When he discussed the matter with the customers, the feedback on the quality and price were good but the customers were very upset on the logistic services due to delayed shipments, frequent changes in shipping schedules, improper documentation, improper identifications, package sizes, losses due to transit damages etc.

After coming back, the export manager checked the dispatch schedules and found that production and ex- works schedules were all proper. Then he studied the logistics systems and found that the logistics cost was very high and all the logistics people were de motivated due to overwork and were complaining of total lack of co-ordination and the system had become totally disorganized.

Questions

1. Explain the problems experienced by Fibre2Fashion Ltd. What is the main cause of these problems?

(15Marks)

2. What logistics model should the company go for to ensure proper operations of the company?

(10Marks).

Note : Answers should be in word format and in details . ( you can copy and paste from the net )

enosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $11.60 per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on more remote properties that require considerable travel time. The owner’s daughter, home from school for the summer, has suggested investigating this question using ABC. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Snow removal Square metres cleaned (00s) 36,730 hundred square metres Travel to jobs Kilometres driven 16,250 kilometres Job support Number of jobs 400 jobs Other (costs of idle capacity and organization-sustaining costs) None NA The total cost of operating the company for the year is $405,000, which includes the following costs: Wages $ 156,000 Supplies 41,000 Snow removal equipment depreciation 21,000 Vehicle expenses 41,000 Office expenses 62,000 President’s compensation 84,000 Total cost $ 405,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Pools Snow Removal Travel to Jobs Job Support Other Total Wages 80 % 10 % 0 % 10 % 100 % Supplies 100 % 0 % 0 % 0 % 100 % Snow removal equipment depreciation 85 % 0 % 0 % 15 % 100 % Vehicle expenses 0 % 65 % 0 % 35 % 100 % Office expenses 0 % 0 % 45 % 55 % 100 % President’s compensation 0 % 0 % 35 % 65 % 100 % Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.) 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) 3. The company recently completed a 3,700-square-metre snow removal job at Hometown Hardware—a 77-kilometre round-trip journey from Kenosha’s offices. Compute the cost of this job using the ABC system. (Round your answers to 2 decimal places.) 4. The revenue from the Hometown Hardware job was $429.20 (3,700 square metres at $11.60 per hundred square metres). Prepare a report showing the margin from this job. ( Round your answers to 2 decimal places.)

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.55 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time.

The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

Activity Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (00s) 11,500 hundred square feet Travel to jobs Miles driven 241,000 miles Job support Number of jobs 1,900 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable

The total cost of operating the company for the year is $353,000 which includes the following costs: Wages $ 144,000 Cleaning supplies 26,000 Cleaning equipment depreciation 14,000 Vehicle expenses 26,000 Office expenses 58,000 President’s compensation 85,000 Total cost $ 353,000 Resource consumption is distributed across the activities as follows:

Distribution of Resource Consumption Across Activities Cleaning Carpets Travel to Jobs Job Support Other Total Wages 79 % 15 % 0 % 6 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 75 % 0 % 0 % 25 % 100 % Vehicle expenses 0 % 82 % 0 % 18 % 100 % Office expenses 0 % 0 % 56 % 44 % 100 % President’s compensation 0 % 0 % 30 % 70 % 100 % Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 58-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $141.30 (600 square feet @ $23.55 per hundred square feet). Calculate the customer margin earned on this job. This is the last question in the assignment. To submit, use Alt + S. To access other questions, proceed to the question map button.Next Visit question mapQuestion 9 of 9 Total9 of 9

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $430,000, which includes the following costs:

Resource consumption is distributed across the activities as follows:

Distribution of Resource Consumption Across Activities

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)

3. The company recently completed a 5 hundred square foot carpet-cleaning job at the Flying N ranch—a 75-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.)

4. The revenue from the Flying N ranch was $140 (5 hundred square feet at $28 per hundred square feet). Prepare a report showing the margin from this job. (Round your intermediate calculations and final answers to 2 decimal places.)

How is market price, average revenue and marginal revenue related for a perfectly competitive firm and why?

1. Total revenue minus total cost is equal to

a. the rate of return

b.marginal revenue

c.profit

d.net cost

2. The Wax Works sells 400 candles at a price of $10 per candle. The Wax Works' total costs for producing 400 candles are $500. The Wax Works' economic profit is ____

3.if diminishing marginal returns have already set in for The Picture Perfect Framing Store and the marginal product of the fifth picture framer is 20, then the marginal product of the sixth picture framer must be

a. negative

b. zero

c. less than 20

d. greater than 20

4. Refer to the table below. Suppose output varies, ceteris paribus, with labor input in the following manner displayed above. After how many units of labor do diminishing returns set in?

a. 3

b.4

c.5

d.they do not set in

5. You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the

a.price of capital increases

b. price of labor decreases.

c. price of capital decreases.

d. marginal product of labor increases

6. Total cost is calculated as

a.the sum of total fixed cost and total variable cost.

b.the product of average total cost and price.

c. the sum of all the firm's explicit costs.

d. the sum of average fixed cost and average variable cost

7. The formula for the total fixed cost is

a.TFC = TC + TVC.

b.TFC = TVC -TC

c.. TFC = TC/TVC.

d.TFC = TC -TVC

8.The Lawn Ranger, a landscaping company, has total costs of $4,000 and total variable costs of $1,000. The Lawn Ranger's total fixed costs are _____

9.Wilbur's Widgets, a widget company, produces 100 widgets. Its average fixed cost is $5 and its total variable cost is $300. What is the total cost of producing 100 widgets?

10. The formula for average fixed costs is

a.TFC - q.

b.TFC/q

c.q/TFC

d.%q/%TFC.

11.________ are likely a fixed cost of a firm.

a.Wages paid to employees

b.The payments for supplies

c. Lease payments for office space

d. Travel expenses to meet with clients

12. Diminishing marginal returns implies

a.decreasing average variable costs.

b.decreasing marginal costs.

c.increasing marginal costs

d.decreasing the average fixed costs.

13.In the short run when the marginal product of labor ________, the marginal cost of an additional unit of output ________.

a.rises; rises

b. falls; falls

c. rises; falls

d. falls; doesn't change

14.If marginal cost is between average variable cost and average total cost, then

a.both average variable cost and average total cost are increasing.

b. both average variable cost and average total cost are decreasing.

c.average variable cost is increasing and average total cost is decreasing

d.average variable cost is decreasing and average total cost is increasing.

15.  The marginal cost curve intersects the average total cost curve at the ________ value of the average total cost curve.

a.maximum

b.minimum

c.zero

d.average